<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
Commission file number 0-13393
AMCORE FINANCIAL, INC.
NEVADA 36-3183870
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
501 Seventh Street, Rockford, Illinois 61104
Telephone number (815) 968-2241
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
The number of shares outstanding of the registrant's Common stock, par value
$.33 per share, at April 30, 1995 was 12,423,221 shares.
Index of Exhibits on Page 11 Page 1 of 22
<PAGE> 2
AMCORE FINANCIAL, INC.
Form 10-Q Table of Contents
PART I Page Number
- ------ -----------
ITEM 1 Financial Statements
Consolidated Balance Sheets as of March 31, 1995 and
December 31, 1994 . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income for the Three
Months Ended March 31, 1995 and 1994 . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1995 and 1994 . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . 6
ITEM 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 7
PART II
- -------
ITEM 4 Submission of Matters to a Vote of Security Holders . . . . . 11
ITEM 6 Exhibits and Reports on Form 10-Q . . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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<PAGE> 3
AMCORE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
(in thousands, except share data) 1995 1994
------------ -----------
<S> <C> <C> <C>
ASSETS Cash and cash equivalents.................................................. $83,051 $86,855
Interest earning deposits in banks......................................... 517 508
Federal funds sold and other short-term investments........................ 5,889 5,056
Mortgage loans held for sale............................................... 9,941 10,184
Securities available for sale.............................................. 289,386 307,171
Securities held to maturity (market value of $389,264 in 1995;
$383,401 in 1994)......................................................... 402,048 402,946
------------ -----------
Total securities........................................................ 691,434 710,117
Loans and leases, net of unearned income................................... 1,107,329 1,080,172
Allowance for loan and lease losses........................................ (12,712) (12,620)
------------ -----------
Net loans and leases.................................................... $1,094,617 $1,067,552
------------ -----------
Premises and equipment, net................................................ 48,032 47,192
Intangible assets, net..................................................... 17,328 17,972
Other real estate owned.................................................... 1,084 1,099
Other assets............................................................... 37,259 38,094
------------ -----------
TOTAL ASSETS............................................................ $1,989,152 $1,984,629
------------ -----------
LIABILITIES LIABILITIES
AND Deposits:
STOCKHOLDERS' Interest bearing.......................................................... $1,364,639 $1,328,763
EQUITY Non-interest bearing...................................................... 229,416 236,269
------------ -----------
Total deposits.......................................................... $1,594,055 $1,565,032
Short-term borrowings...................................................... 174,560 206,758
Long-term borrowings....................................................... 24,433 24,837
Other liabilities.......................................................... 24,092 21,954
------------ -----------
TOTAL LIABILITIES....................................................... $1,817,140 $1,818,581
------------ -----------
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value: authorized 10,000,000 shares;
issued none............................................................... $ - $ -
Common stock, $.33 par value: authorized 30,000,000 shares;
March 31, December 31,
1995 1994
Issued............13,287,735 13,287,735
Outstanding.......12,423,221 12,400,720 4,430 4,430
Additional paid-in capital................................................. 50,885 50,879
Retained earnings.......................................................... 127,770 125,019
Treasury stock and other................................................... (8,025) (8,296)
Net unrealized loss on securities available for sale....................... (3,048) (5,984)
------------ -----------
TOTAL STOCKHOLDERS' EQUITY.............................................. $172,012 $166,048
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.............................. $1,989,152 $1,984,629
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE> 4
AMCORE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
(in thousands, except per share data) 1995 1994
------- -------
<S> <C> <C> <C>
INTEREST Interest and fees on loans and leases............................................... $23,698 $19,483
INCOME Interest on securities:
Taxable........................................................................... 8,366 6,858
Tax-exempt........................................................................ 2,613 2,755
------- -------
TOTAL INCOME FROM SECURITIES.................................................... $10,979 $9,613
------- -------
Interest on federal funds sold and other short-term investments..................... 284 224
Interest and fees on mortgage loans held for sale................................... 465 848
Interest on deposits in banks....................................................... 19 52
------- -------
TOTAL INTEREST INCOME........................................................... $35,445 $30,220
------- -------
INTEREST Interest on deposits................................................................ $13,703 $11,215
EXPENSE Interest on short-term borrowings................................................... 3,194 790
Interest on long-term borrowings.................................................... 462 478
Other............................................................................... 126 105
------- -------
TOTAL INTEREST EXPENSE.......................................................... $17,485 $12,588
------- -------
NET INTEREST INCOME................................................................. $17,960 $17,632
Provision for loan and lease losses............................................. 296 128
------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES....................... $17,664 $17,504
------- -------
OTHER Trust revenues...................................................................... $2,823 $2,621
INCOME Service charges on deposits......................................................... 1,679 1,571
Mortgage revenues................................................................... 546 759
Collection fees..................................................................... 453 452
Other............................................................................... 1,803 1,550
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TOTAL OTHER INCOME, EXCLUDING NET SECURITY GAINS................................ $7,304 $6,953
Net security gains.................................................................. 619 371
------- -------
TOTAL OTHER INCOME.............................................................. $7,923 $7,324
OPERATING Compensation expense................................................................ $8,230 $7,624
EXPENSES Employee benefits................................................................... 2,583 2,285
Net occupancy expense............................................................... 1,313 1,111
Equipment expense................................................................... 1,548 1,413
Insurance expense................................................................... 1,039 1,030
Professional fees................................................................... 534 698
Advertising and business development................................................ 485 471
Amortization of intangible assets................................................... 637 639
Other............................................................................... 3,323 3,177
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TOTAL OPERATING EXPENSES........................................................ $19,692 $18,448
------- -------
INCOME BEFORE INCOME TAXES.......................................................... $5,895 $6,380
Income taxes........................................................................ 1,281 1,617
------- -------
NET INCOME...................................................................... $4,614 $4,763
======= =======
EARNINGS PER COMMON SHARE....................................................... $0.37 $0.38
DIVIDENDS PER COMMON SHARE...................................................... $0.15 $0.135
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE> 5
AMCORE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
(in thousands) 1995 1994
------- -------
<S> <C> <C> <C>
CASH FLOWS $4,614 $4,763
FROM Adjustments to reconcile net income to net
OPERATING cash provided by (required for) operating activities:
ACTIVITIES Depreciation and amortization of premises and equipment......................... 1,110 1,044
Amortization and accretion of securities, net................................... (94) 1,080
Provision for loan and lease losses............................................. 296 128
Amortization of intangible assets............................................... 637 639
Gain on sale of securities available for sale................................... (661) (371)
Loss on sale of securities available for sale................................... 42 -
Loss on sale of trading securities.............................................. - 10
Purchase of trading securities.................................................. (3,016) (313)
Proceeds from sales of trading securities....................................... 3,016 1,206
Non-employee directors compensation expense..................................... 87 129
Deferred income taxes........................................................... (407) (601)
Net decrease in mortgage loans held for sale.................................... 243 10,180
Other, net...................................................................... 1,707 (1,513)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES.................................... $7,574 $16,381
------- -------
CASH FLOWS Proceeds from maturities of securities.............................................. $32,014 $40,007
FROM Proceeds from sales of securities available for sale................................ 33,249 23,324
INVESTING Purchase of securities held to maturity............................................. (10,133) (29,715)
ACTIVITIES Purchase of securities available for sale........................................... (31,125) (91,183)
Net increase in federal funds sold and other short-term investments................. (833) (695)
Net (increase) decrease in interest earning deposits in banks....................... (9) 91
Net increase in loans and leases.................................................... (27,308) (6,637)
Proceeds from the sale of premises and equipment.................................... 130 88
Premises and equipment expenditures................................................. (2,061) (2,051)
------- -------
NET CASH REQUIRED FOR INVESTING ACTIVITIES................................... ($6,076) ($66,771)
------- -------
CASH FLOWS Net increase (decrease) in demand deposits and savings accounts..................... ($24,540) $20,109
FROM Net increase (decrease) in time deposits............................................ 53,563 (10,173)
FINANCING Net increase (decrease) in short-term borrowings.................................... (32,198) 31,074
ACTIVITIES Payment of long-term borrowings..................................................... (455) (480)
Dividends paid...................................................................... (1,861) (1,681)
Proceeds from exercise of incentive stock options................................... 189 -
------- -------
NET CASH PROVIDED BY (REQUIRED FOR) FINANCING ACTIVITIES..................... ($5,302) $38,849
------- -------
Net change in cash and cash equivalents............................................. ($3,804) ($11,541)
------- -------
Cash and cash equivalents:
Beginning of year.................................................................. $86,855 $88,431
------- -------
End of period...................................................................... $83,051 $76,890
======= =======
SUPPLEMENTAL Cash payments for:
DISCLOSURES OF Interest paid to depositors........................................................ $12,353 $10,966
CASH FLOW Interest paid on borrowings........................................................ 3,831 1,220
INFORMATION Income taxes paid.................................................................. 377 1,925
NON-CASH Other real estate acquired in settlement of loans................................... 53 -
INVESTING Transfer of short-term investments to securities available for sale................. - 10,307
ACTIVITIES
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE> 6
ITEM 1 - FINANCIAL STATEMENTS (continued)
AMCORE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting and with instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, these financial statements do not include all the
information and footnotes required by generally accepted accounting principles.
These financial statements include, however, all adjustments (consisting of
normal recurring accruals), which in the opinion of management are considered
necessary for the fair presentation of the results of operations for the
periods shown.
The consolidated financial statements and the financial information have been
restated to reflect the August 1, 1994 merger with First State Bancorp of
Princeton, Illinois, Inc. (FSB) and the December 19, 1994 merger with NBA
Holding Company (NBA) which were accounted for using the pooling of interests
method. Operating results for the three month period ended March 31, 1995 are
not necessarily indicative of the results that may be expected for the fiscal
year ending December 31, 1995. For further information, refer to the
consolidated financial statements and footnotes thereto included in the Form
10-K Annual Report of AMCORE Financial, Inc. and Subsidiaries (the "Company")
for the year ended December 31, 1994.
NOTE 2 - EARNINGS PER SHARE
Earnings per share is based on dividing net income by the weighted average
number of shares of common stock outstanding during the periods, as adjusted
for common stock equivalents. Common stock equivalents consist of shares
issuable under options granted pursuant to various stock incentive plans. The
fully-dilutive effect of common equivalents on earnings per share was less than
three percent for all periods presented. Share data for all prior year periods
presented have been restated to reflect the three-for-two stock split in
December 1993 and the mergers with FSB and NBA.
NOTE 3 - LONG-TERM BORROWINGS
The Company has a term loan agreement (Agreement) with an unaffiliated
financial institution that requires semi-annual principal payments and allows
several interest rate and funding period options. At March 31, 1995, the
balance was $22 million and the selected interest rates ranged from 7.84% to
8.125%.
The Agreement contains several restrictive covenants, including restrictions on
dividends to stockholders and maintenance of various capital adequacy levels.
All capital adequacy ratios remained well above the required minimums per the
Agreement.
Scheduled principal reductions on the Agreement are required as follows:
<TABLE>
<CAPTION>
(in thousands) Total
-------
<S> <C>
1995 . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000
1996 . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
1997 . . . . . . . . . . . . . . . . . . . . . . . . . 6,000
1998 . . . . . . . . . . . . . . . . . . . . . . . . . 6,000
-------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . $22,000
=======
</TABLE>
Other long-term borrowings include a non-interest bearing note from the January
19, 1993 acquisition of Rockford Mercantile Agency. The note requires annual
payments of $444,000 beginning in 1994 through 2002. The note was discounted
at an interest rate of 8.0%.
-6-
<PAGE> 7
AMCORE FINANCIAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis focuses on the consolidated financial
condition of AMCORE Financial, Inc. and subsidiaries ("the Company") as of
March 31, 1995 as compared to December 31, 1994 and the results of operations
for the three months ended March 31, 1995 as compared to the same period in
1994. This discussion is intended to be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this
report.
Earnings Summary
Net income for the first quarter of 1995 was $4.6 million, a 3.1% decline from
the first quarter of 1994. Earnings per share through the first three months
of 1995 were $0.37 as compared to $0.38 for the same period in the prior year.
Expenses associated with branch expansion and the upgrade of all major data
processing applications were the primary factors causing the drop in earnings.
Net interest income rose by $328,000 or 1.9% despite a 30 basis point decline
in the net interest margin to 4.30% in the first quarter of 1995. Total
fee-based income, exclusive of security gains, increased by 5.0% or $351,000
when comparing first quarter results for 1995 and 1994. Operating expenses for
the same periods increased $1.2 million or 6.7%, primarily due to the factors
mentioned above.
The return on average assets (ROA) for the first quarter of 1995 was .95%
versus 1.06% a year earlier. Return on average equity (ROE) was 11.13% through
the first three months of 1995 as compared to 11.74% for 1994.
Net Interest Income
The primary source of earnings for the Company's banking affiliates is net
interest income which increased 1.9% to $17.9 million in the first quarter of
1995 compared with $17.6 million in 1994. In the following analysis, net
interest income is presented on a tax equivalent basis, which adjusts reported
interest income on tax-exempt loans and securities to compare with other
sources of fully taxable interest income. Unlike changes in volume, or rates
paid or earned, it has no effect on actual net interest income or net income,
as reported in the Consolidated Financial Statements.
Tax equivalent net interest income increased $251,000 for the first quarter of
1995 compared to the prior year and was a direct result of loan growth. The
net interest margin, however, which is computed by dividing the annualized tax
equivalent net interest income by the average earning assets, fell to 4.30% as
compared to 4.60 % for the first quarter of 1994. This decline resulted from a
rising interest rate environment that caused an increase in funding costs at a
faster pace than the increased yields earned on assets as well as a higher
proportion of costly time deposits in the funding mix. The net interest
spread, which is the difference between the yield on earning assets and the
rate paid on interest-bearing liabilities also fell for the first quarter of
1995 to 3.62% as compared to 4.09% for the same period in 1994.
For the first quarter of 1995, total average earning assets were $1.81 billion,
representing an increase of 8.4% or $140.6 million over 1994. Average loans
grew by $131 million or 13.6%, comprising the majority of the increase in
earning assets. An increase in the adjustable rate residential real estate
portfolio was a primary factor behind the loan growth. The Federal Reserve's
monetary policy actions may slow future loan growth, which may have an adverse
impact on interest income. Average total securities also grew in the first
quarter of 1995 to $687.6 million, a 3.6% increase over 1994. Mortgage loans
held for sale declined $6.0 million from the prior year due to increases in
long-term mortgage rates which significantly reduced closing volumes.
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<PAGE> 8
ANALYSIS OF NET INTEREST INCOME-TAX EQUIVALENT BASIS
Unaudited Quarters Ended March 31,
(in thousands)
<TABLE>
<CAPTION>
1995/1994
INTEREST EARNED CHANGE
AVERAGE BALANCE AVERAGE RATE OR PAID DUE TO
- ------------------------------------------------------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994 VOLUME RATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS:
$479,924 $449,168 6.97% 6.11% Taxable securities........................... $8,366 $6,858 $492 $1,016
207,664 214,804 7.74% 7.89% Tax-exempt securities (1).................... 4,020 4,238 (139) (79)
- ------------------------------------------------------------------------------------------------------------------------------------
$687,588 $663,972 7.21% 6.68% Total securities............................. $12,386 $11,096 $353 $937
- ------------------------------------------------------------------------------------------------------------------------------------
$7,028 $13,015 8.65% 7.44% Mortgage loans held for sale (3)............. $152 $242 $(124) $34
1,092,730 961,726 8.69% 8.13% Loans (1) (2)................................ 23,751 19,537 2,784 1,430
19,509 27,495 6.21% 4.02% Other earning assets......................... 303 276 (95) 122
Fees on mortgage loans held for sale (3)..... 313 606 (417) 124
- ------------------------------------------------------------------------------------------------------------------------------------
$1,806,855 $1,666,208 8.17% 7.62% TOTAL EARNING ASSETS (FTE) $36,905 $31,757 $2,501 $2,647
====================================================================================================================================
INTEREST BEARING LIABILITIES:
$380,207 $440,809 2.67% 1.96% Interest-bearing demand deposits............. $2,506 $2,127 ($326) $705
137,860 139,298 2.47% 2.03% Savings deposits............................. 840 697 (7) 150
804,702 726,011 5.22% 4.69% Time deposits................................ 10,357 8,391 973 993
- ------------------------------------------------------------------------------------------------------------------------------------
$1,322,769 $1,306,118 4.20% 3.48% Total interest-bearing deposits.............. $13,703 $11,215 $640 $1,848
- ------------------------------------------------------------------------------------------------------------------------------------
$205,677 $103,528 6.30% 3.09% Short-term borrowings........................ $3,194 $790 $1,189 $1,215
24,497 29,767 7.65% 6.51% Long-term borrowings......................... 462 478 (94) 78
4,254 3,655 12.01% 11.65% Other........................................ 126 105 18 3
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST-BEARING
$1,557,197 $1,443,068 4.55% 3.54% LIABILITIES................................ $17,485 $12,588 $1,753 $3,144
====================================================================================================================================
3.62% 4.09% INTEREST RATE SPREAD (FTE)...................
====================================================================================================================================
NET INTEREST MARGIN/
4.30% 4.60% NET INTEREST INCOME (FTE).................. $19,420 $19,169 $748 ($497)
====================================================================================================================================
</TABLE>
The above table shows the changes in interest income (tax equivalent) and
interest expense attributable to rate and volume variances. The change in
interest income (tax equivalent) due to both rate and volume has been allocated
to rate and volume changes in proportion to the relationship of the absolute
dollar amounts of the change in each.
(1) The interest on tax-exempt investment securities and tax-exempt loans is
calculated on a tax equivalent basis assuming a federal tax rate of 35%.
(2) The balances of nonaccrual loans are included in average loans
outstanding. Interest on loans includes yield-related loan fees.
(3) The yield-related fees recognized from the origination of mortgage loans
held for sale are in addition to the interest earned on the loans during
the period in which they are warehoused for sale as shown above.
Average total interest-bearing liabilities grew from the first quarter of 1994
by 7.9% or $114.1 million. Average interest-bearing deposits rose by $16.7
million or 1.3% during the first quarter of 1995 while average short-term
borrowings increased by $102.1 million. The increase in average
interest-bearing deposits was due to growth in average time deposits of $78.7
million (10.8%). This growth in average time deposits more than exceeded
declines in interest-bearing demand deposits and savings deposits of $60.6
million (13.7%) and $1.4 million (1.0%), respectively. The increase in
short-term borrowings was due to the purchase of adjustable rate
mortgage-backed securities funded primarily through repurchase agreements.
Long-term borrowings declined $5.3 million from scheduled principal reductions.
For the first quarter of 1995, average interest-bearing liabilities were 86.2%
of average earning assets as compared to 86.6% a year earlier. Average earning
assets as a percentage of total average assets was 91.4% and 91.2%,
respectively, for the first quarters of 1995 and 1994.
The yield on average earning assets for the first quarter of 1995 was 8.17%, a
55 basis point increase over the same period in 1994. The average rate on
interest-bearing liabilities rose by 101 basis points to 4.55% when compared to
the first quarter of 1994. The larger increase in rates paid on
interest-bearing liabilities versus the yield on earning assets caused the
previously mentioned declines in both net interest spread and net interest
margin.
-8-
<PAGE> 9
A rising rate environment contributed to increases in both loan and security
yields. The yield on loans for the first quarter of 1995 was 8.69%,
representing a 56 basis point increase over 1994. The reinvestment of
securities at higher prevailing market rates resulted in a 53 basis point rise
in yield on the securities portfolio. Indicative of the higher rate
environment, other earning assets (federal funds sold and other short-term
investments) yielded 6.21% through the first three months of 1995, as compared
to 4.02% for the same period last year. This same rising rate environment
contributed to a 121 basis point rise in yields on mortgage loans held for sale.
The average rate paid on interest-bearing deposits increased by 72 basis points
to 4.20% for the first quarter of 1995. This increase was primarily caused by
higher time deposit rates resulting from higher prevailing market rates and
higher promotional rates offered. The increase also reflects a change in the
mix of interest-bearing deposits toward more costly time deposits, as customers
have locked in the higher term rates. This trend, if continued, would have an
unfavorable impact on the net interest margin assuming a stable to declining
interest rate environment.
Significantly higher market rates on repurchase agreements resulted in an
average rate paid on short-term borrowings of 6.30% as compared to 3.09% for
the first quarter of 1994. Long-term borrowings had an average rate of 7.65%,
a 114 basis point rise over the first quarter of 1994, a direct result of
approximately half the balance on the term loan agreement being subject to
floating rate increases. The interest rate risk on the remaining balance of
the term loan agreement is hedged through the use of fixed rate swap
agreements. During the first quarter, one of these swap agreements was closed
out by the Company at a gain of $200,000. This gain will be recognized ratably
over the remaining life of the swap contract.
Provision and Allowance for Loan and Lease Losses
The provision for loan and lease losses for the first quarter of 1995 was
$296,000 versus $128,000 for the same period in 1994. Total net charge-offs
for the quarter were $204,000 as compared with $283,000 a year earlier. The
annualized ratio of first quarter net charge-offs to average total loans and
leases was .07% in 1995 and .12% in 1994.
The allowance for loan and lease losses, as a percentage of total net loans and
leases was 1.15% at March 31, 1995 as compared to 1.42% at March 31, 1994 and
1.17% at December 31, 1994. The allowance as a percentage of non-performing
loans and leases at March 31, 1995 was 106.5% versus 115.2% a year earlier and
105.2% at December 31, 1994. Total non-performing assets that include
non-performing loans and leases and other real estate owned, as a percentage of
loans, leases and other real estate owned, was 1.17% at March 31, 1995, 1.31%
at March 31, 1994 and 1.21% at December 31, 1994.
Total non-performing loans were $11.9 million at March 31, 1995, a decrease of
$68,000 since December 31, 1994. Other real estate owned totaled $1.1 million
at March 31, 1995, an increase of $310,000 since a year ago and a slight
decline from December 31, 1994.
Other Income
Non-interest income, exclusive of security gains, totaled $7.3 million for the
first quarter of 1995, an increase of $351,000 or 5.0% over the first quarter
of 1994. Trust income increased by $202,000 or 7.7%, while deposit service
charges rose by 6.9% or $108,000. These increases combined with a $253,000
rise in other income, more than offset a $213,000 or 28.1% decline in mortgage
revenues. The rising interest rate environment caused lower levels of
refinancing, resulting in the mortgage revenue decline. Closed loan volume for
the first quarter of 1995 was $22 million, down $32 million from last year,
resulting in a $258,000 or 69.5% drop in loan production income. At the same
time, loan servicing fees rose by 11.6%, due to servicing purchased during 1994
and growth through new originations.
Net security gains for the first quarter of 1995 were $619,000 as compared to
$371,000 a year earlier. All securities sold were from the available for sale
portfolio.
Operating Expenses
Total operating expenses for the first quarter of 1995 were $19.7 million, an
increase of $1.2 million or 6.7%, when compared to the first quarter of 1994.
As the largest component of total operating expenses, personnel costs, which
include compensation and employee benefits, rose by $904,000 or 9.1% to $10.8
-9-
<PAGE> 10
million for the first quarter of 1995. This was a direct result of branch
expansion at the Rockford bank, as well as normal salary increases.
For the first three months of 1995, total occupancy and equipment expense was
$2.9 million, an increase of $337,000 over the same period a year ago. This
13.4% increase can be attributed to the previously mentioned branch expansion
as well as the upgrade of new information systems hardware and software.
The remaining categories of operating expenses either increased or decreased
minimally when comparing the first quarter of 1995 with the same period in
1994. Total operating expenses as a percent of average assets were 1.00% and
1.01% for the first quarter of 1995 and 1994, respectively. Total operating
expenses are expected to remain above 1994 levels due to the expansion of
branch locations, the implementation of platform and teller automation systems,
increased amortization of system conversion costs incurred during 1994, and the
integration of NBM Bancorp, Inc. in 1995.
Income tax expense for the first quarter of 1995 was $1.3 million, a $336,000
or 20.8% drop from the first quarter of 1994. This decline was due primarily
to tax credits resulting from data processing research and experimentation.
Without the impact of these tax credits, the effective tax rate for the first
quarter of 1995 would have been 26.8% versus 25.3% a year earlier.
Summary of Financial Condition
Total assets at March 31, 1995 were $1.99 billion, a $4.5 million increase
since December 31, 1994. Total deposits at the end of the quarter were $1.59
billion, an increase of $29.0 million or 1.9% since year-end. A $35.9 million
increase in interest bearing deposits, particularly in certificates of deposit,
offset a $6.9 million decrease in non-interest bearing deposits. The shift
from non-interest bearing deposits to interest bearing deposits is a direct
result of the rising interest rate environment and consumer preferences. Total
securities fell by $18.7 million as securities matured or were sold during the
first quarter of 1995 to finance loan growth. Loans which totaled $1.11
billion at quarter-end grew by $27.2 million or 2.5%. Adjustable rate
residential real estate loans, commercial real estate loans and consumer loans
were the primary categories contributing to the loan growth. Short-term
borrowings at March 31, 1995 were $174.6 million, a decline of $32.2 million
since year-end. This decline was largely due to a reduction in repurchase
agreements that were replaced by time deposits.
Capital
Stockholders' equity at March 31, 1995 was $172.0 million, an increase of 3.6%
or $6.0 million since December 31, 1994. The risk-based capital ratio was
13.05% at March 31, 1995 as compared to 12.89% at December 31, 1994. Tier 1
risk-based capital increased to 12.08% versus 11.91% at year-end. The leverage
ratio at the end of the first quarter was 8.04%, well above the required
minimum of 4.00%. Dividends per share for the first quarter of 1995 increased
by 11.1% to $.15 per share.
Other Matters
During the first quarter of 1995, the Company implemented FAS No. 114 -
"Accounting by Creditors for Impairment of a Loan" and the related amended
statement FAS No. 118. The implementation of this new accounting standard did
not have an impact on the consolidated financial statements.
On November 10, 1994, the Company signed a definitive agreement to merge with
NBM Bancorp, Inc. (NBM) in an exchange of common stock. NBM is a two-bank
holding company with assets of approximately $170 million and banking offices
in Mendota and Peru, Illinois. The transaction has been approved by both the
appropriate regulatory agencies and NBM stockholders. The transaction is
expected to close on May 24, 1995 and will be accounted for as a pooling of
interests.
In March 1995, the Financial Accounting Standards Board issued FAS No. 121 -
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of." The effective date for implementation of this new standard
is for fiscal years beginning after December 15, 1995, however, earlier
adoption is encouraged. Management is currently reviewing all long-lived
assets for impairment. The impact of this new rule on the Company's financial
statements has yet to be determined.
-10-
<PAGE> 11
PART II
ITEM 4. Submission of Matters to a Vote of Security Holders
(a) AMCORE Financial, Inc. 1995 Annual Meeting of Stockholders was held on
May 9, 1995.
(b) Proxies were solicited by AMCORE Financial, Inc. management for the
purpose of electing five Class III directors whose term will expire in
1998. All such nominees were elected as Class III directors.
(c) Proxies were solicited by AMCORE Financial, Inc. management to ratify
the appointment of McGladrey & Pullen, LLP as independent auditors.
The appointment of McGladrey & Pullen, LLP was ratified.
(d) Proxies were solicited by AMCORE Financial, Inc. management to approve
the AMCORE Financial, Inc. 1995 Stock Incentive Plan. The 1995 Stock
Incentive Plan was approved.
ITEM 6. Exhibits and Reports on Form 10-Q Page
----
(a) 2 Agreement and Plan of Reorganization by and among
AMCORE Financial, Inc., NBM Acquisition, Inc. and NBM
Bancorp, Inc. (Incorporated by reference to the Company's
Amendment No. 1 to Form S-4 as filed with the Commission
on February 23, 1995).
4 Rights Agreement dated February 12, 1986, between AMCORE
Financial, Inc. and First Wisconsin Trust Company
(Incorporated by reference to Exhibit 4(a) of the Company's
Registration Statement on Form S-1 dated July 2, 1986).
10.1 Amended $10,000,000 Revolving Credit Facility dated 13
November 10, 1994 with the First National Bank of Chicago,
Harris Trust and Savings Bank, The Northern Trust Company
and LaSalle National Bank.
11 Statement Re-Computation of Per Share Earnings 17
22 1995 Notice of Annual Meeting of Stockholders and Proxy
Statement (Incorporated by reference to Exhibit 22 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1994).
27 Financial Data Schedule 18
99 Additional exhibit - Press release dated April 26, 1995. 19
(b) No reports on Form 8-K were filed during the first quarter
of 1995.
-11-
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMCORE Financial, Inc.
(Registrant)
Date: May 12, 1995
/s/ John R. Hecht
-------------------------------------------------
John R. Hecht
Senior Vice President and Chief Financial Officer
(Duly authorized officer of the registrant
and principal financial officer)
-12-
<PAGE> 1
EXHIBIT 10.1
THIRD AMENDMENT
DATED AS OF NOVEMBER 10, 1994
TO $10,000,000 CREDIT AGREEMENT
DATED AS OF NOVEMBER 16, 1992
This Third Amendment (the "Amendment") is entered into as of November
10, 1994 by and among Amcore Financial, Inc. (the "Borrower"), the undersigned
lenders (the "Lenders") and The First National Bank of Chicago as agent (the
"Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent are parties to that
certain $10,000,000 Credit Agreement dated as of November 16, 1992 (as amended
prior to the date hereof, the "Credit Agreement"); and
WHEREAS, the Borrower has requested the Lenders to amend and waive
certain provisions of the Credit Agreement in certain respects as hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises herein contained,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used and not otherwise defined
herein shall have the meanings attributed to such terms in the Credit
Agreement.
2. Waiver. The Lenders hereby waive the Borrower's noncompliance with
Section 6.14 (xvi) and any Default created thereby to the extent such
noncompliance or Default was caused by the Borrower's failure to furnish an
updated Schedule "2" to the Credit Agreement to the Agent and the Lenders
within five (5) Business Days after the Borrower's Acquisition of First State
Bancorp of Princeton, Illinois, Inc.; provided, however, that the Borrower
shall furnish such updated Schedule "2" to the Agent and the Lenders within
five (5) Business Days after the date hereof.
3. Amendment. The Borrower and the Lenders hereby amend the Credit
Agreement as follows:
3.1. The definition of "Facility Termination Date" set forth in
Article I of the Credit Agreement is hereby amended by deleting "November 10,
1994" and inserting "November 9, 1995" in lieu thereof.
3.2. Section 6.13 is amended by deleting "(other than sales of
assets by Banking Subsidiaries in the ordinary course of business)"
-13-
<PAGE> 2
and inserting "(other than sales of assets by Subsidiaries in the ordinary
course of business)" in lieu thereof.
3.3. Section 6.14 (vi) is deleted in its entirety and the following
is inserted in lieu thereof:
"(vi) Investments of the Borrower in its Subsidiaries and
Acquisitions (other than Acquisitions of Banking
Subsidiaries and holding companies thereof);
provided that (a) such Investments together with the
aggregate purchase price of all such Acquisitions
made after the date of this Agreement shall not at
any one time outstanding exceed an aggregate
principal amount of $30,000,000, (b) any such
Acquisition shall have been approved and recommended
by the board of directors of the entity being
acquired, and (c) immediately prior to and after the
consummation of any such Acquisition, no Default or
Unmatured Default exists."
3.4. Section 6.14 (xiii) is deleted in its entirety and the
following is inserted in lieu thereof:
"(xiii) Any Acquisition of a Banking Subsidiary or a holding
company thereof; provided that (a) the total assets
acquired pursuant to such Acquisition do not exceed
an aggregate amount of $300,000,000, (b) such
Acquisition shall have been approved and recommended
by the board of directors of such entity, and (c)
immediately prior to and after the consummation of
any such Acquisition, no Default or Unmatured
Default exists; and provided further that (x) if
such Acquisition is of a bank or a bank holding
company, such bank or bank holding company shall
have a composite CAMEL rating of 2 or better and (y)
if such Acquisition is of a savings and loan
association or branch thereof, either (1) such
savings and loan association or branch thereof has a
composite MACRO rating of 2 or better, or (2) such
Acquisition is being made from the Resolution Trust
Corporation or any successor thereof and is being
assisted by the Resolution Trust Corporation or any
successor thereof."
3.5. Section 6.14 (xvi) is amended by deleting "Section 6.14
(xiii)" and inserting "Sections 6.14 (vi) and 6.14 (xiii)" in lieu thereof.
4. Representations and Warranties. In order to induce the Lenders to
enter into this Amendment, the Borrower represents and warrants that:
4.1. The representations and warranties set forth in Article V of the
Credit Agreement, as amended and modified hereby, are
-14-
<PAGE> 3
true, correct and complete on the date hereof as if made on and as of the date
hereof, except as such representations and warranties by their terms are made
solely as of a prior date.
4.2. There exists no Default or Unmatured Default as of the date
hereof, except as waived pursuant to Section 2 hereof.
4.3. The execution and delivery by the Borrower of this Amendment and
the performance of its obligations hereunder have been duly authorized by
proper corporate proceedings and this Amendment and the Credit Agreement, as
amended and modified hereby, constitute legal, valid and binding obligations of
the Borrower, enforceable against the Borrower in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
4.4. Neither the execution and delivery by the Borrower of this
Amendment, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Borrower or
any Subsidiary or the Borrower's or any Subsidiary's articles of incorporation
or by-laws or the provisions of any indenture, instrument or agreement to which
the Borrower or any Subsidiary is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on the property of
the Borrower or any Subsidiary pursuant to the terms of any such indenture,
instrument or agreement.
5. Effective Date. This Amendment shall become effective as of the date
first above written (the "Effective Date") upon the Agent's receipt of
counterparts of this Amendment duly executed by the Borrower and the Required
Lenders.
6. Ratification. It is understood and agreed that all of the terms,
conditions and covenants of the Credit Agreement, except as amended and
modified hereby, shall remain unaltered and in full force and effect and shall
continue to be binding upon the Borrower in all respects. The Credit
Agreement, as amended and modified hereby, is hereby ratified, approved and
confirmed in all respects.
7. Reference to Agreement. From and after the Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereof", or "hereunder"
or words of like import, and all references to the Credit Agreement in any and
all agreements, instruments, documents, notes, certificates and other writings
of every kind and nature shall be deemed to mean the Credit Agreement, as
amended and modified hereby.
-15-
<PAGE> 4
8. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent
have executed this Amendment as of the date first above written.
AMCORE FINANCIAL, INC.
By:
--------------------------------
Title:
-----------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By:
--------------------------------
Title:
-----------------------------
HARRIS TRUST AND SAVINGS BANK
By:
--------------------------------
Title:
-----------------------------
THE NORTHERN TRUST COMPANY
By:
--------------------------------
Title:
-----------------------------
LASALLE NATIONAL BANK
By:
--------------------------------
Title:
-----------------------------
-16-
<PAGE> 1
AMCORE FINANCIAL, INC. AND SUBSIDIARIES
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
(in 000's) 1995 1994
------ ------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE:
EARNINGS
Income applicable to common stock $4,614 $4,763
SHARES
Weighted average number of common shares 12,410 12,376
Dilutive effect of outstanding options (as
determined by application of the treasury
stock method) 191 182
------ ------
Weighted average number of shares, as adjusted 12,601 12,558
====== ======
PRIMARY EARNINGS PER SHARE* $0.366 $0.379
====== ======
FULLY DILUTED EARNINGS PER SHARE:
EARNINGS
Income applicable to common stock $4,614 $4,763
SHARES
Weighted average number of shares, as adjusted
per primary computation above 12,601 12,558
Additional dilutive effect of outstanding options
(as determined by application of the treasury
stock method) -- --
------ ------
Weighted average number of shares, as adjusted 12,601 12,558
====== ======
FULLY DILUTED EARNINGS PER SHARE* $0.366 $0.379
====== ======
</TABLE>
* This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
-17-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 83,051
<INT-BEARING-DEPOSITS> 517
<FED-FUNDS-SOLD> 5,889
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 299,327
<INVESTMENTS-CARRYING> 402,048
<INVESTMENTS-MARKET> 389,264
<LOANS> 1,107,329
<ALLOWANCE> 12,712
<TOTAL-ASSETS> 1,989,152
<DEPOSITS> 1,594,055
<SHORT-TERM> 174,560
<LIABILITIES-OTHER> 24,092
<LONG-TERM> 24,433
<COMMON> 4,430
0
0
<OTHER-SE> 178,655
<TOTAL-LIABILITIES-AND-EQUITY> 1,989,152
<INTEREST-LOAN> 23,698
<INTEREST-INVEST> 11,263
<INTEREST-OTHER> 484
<INTEREST-TOTAL> 35,445
<INTEREST-DEPOSIT> 13,703
<INTEREST-EXPENSE> 17,485
<INTEREST-INCOME-NET> 17,960
<LOAN-LOSSES> 296
<SECURITIES-GAINS> 619
<EXPENSE-OTHER> 19,692
<INCOME-PRETAX> 5,895
<INCOME-PRE-EXTRAORDINARY> 4,614
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,614
<EPS-PRIMARY> .366
<EPS-DILUTED> .366
<YIELD-ACTUAL> 4.30
<LOANS-NON> 9,883
<LOANS-PAST> 971
<LOANS-TROUBLED> 2,112
<LOANS-PROBLEM> 14,320
<ALLOWANCE-OPEN> 12,620
<CHARGE-OFFS> 531
<RECOVERIES> 327
<ALLOWANCE-CLOSE> 12,712
<ALLOWANCE-DOMESTIC> 7,305
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 5,407
</TABLE>
<PAGE> 1
NEWS RELEASE
Date: April 26, 1995
Contact: Ben Rubendall
815-961-7164
[AMCORE LOGO]
AMCORE REPORTS 1ST QUARTER EARNINGS
ROCKFORD, ILL. - AMCORE Financial, Inc. posted first quarter earnings
of $4.6 million, or 37 cents per share for the period ended March 31, 1995
compared with 38 cents for the same period in 1994.
All financial information has been restated to reflect the mergers
with First State Bancorp of Princeton, Ill., Inc., and NBA Holding Company, of
Aledo.
Net interest income for the quarter was $18 million, up 1.9 percent,
from $17.6 million in the same quarter of 1994 as a result of higher loan
volume. Average loans increased $131 million, or 14 percent and partially
offset the compression in margins caused by an increase in funding costs. The
net interest margin, however, fell 31 basis points to 4.30 percent, down from
4.61 percent in the 1994 quarter.
Fee income for the quarter was up $350,000, or 5 percent, excluding
security gains. Much of the increase was due to a 7.7 percent increase in trust
revenues. Mortgage fee income declined 28 percent and total mortgage revenues
fell $596,000. The volume of mortgage originations and refinancing has been
down since the second quarter of 1994, when interest rates rose.
Much of the decline in quarterly earnings was due to costs associated
with opening new facilities and the conversion of data processing systems,
lower mortgage revenues, and increased provisions for loan losses to adjust for
growth in the loan portfolio. The provision for loan losses for the quarter was
$300,000, up $168,000 from the first quarter of 1994.
"The northern Illinois economy is growing rapidly," Dargene said.
"Last week Rockford was listed in the top 10 in the United States in terms of
percentage increase in the value of commercial building permits issued compared
with the previous year. This type of activity has resulted in a significant
increase in business and an expansion of our loan portfolio."
Total operating expenses for the quarter were up $1.2 million, or 6.7
percent, from the 1994 quarter largely due to the branch expansion and on-going
upgrading of data processing systems. Costs associated with the opening of
seven new branches reduced quarterly earnings by approximately 2 cents per
share.
Total income taxes decreased $336,000 from the same quarter of 1994
due to federal tax credits realized and lower state income taxes.
-more-
AMCORE Financial, Inc.
-19-
<PAGE> 2
AMCORE Financial, Inc.
First Quarter Earnings 1995
Page 2
"We are in the process of implementing several measures to increase
our operating efficiency," Dargene said. "We are merging and realigning our
smaller banking operations into larger groups, which will have economies of
scale while still keeping their local orientations. We are also in the midst
of a comprehensive upgrade of our data processing systems that will lead to
increased efficiency and allow us to offer a wider range of banking products.
"Significant revenue growth opportunities will be investigated in the
coming months," Dargene said. "For example, we are negotiating with Charles E.
Schwab & Co. to market our Vintage family of no-load mutual funds on a national
basis. The funds are now offered by specially trained personnel in our banks,
as well as in our trust and brokerage operations.
"The Vintage funds should be competitive, since Lipper Analytical
Services recently ranked our equity growth fund among the top 10
best-performing equity growth funds that they follow. The change to a national
focus in our marketing strategy should result in increased sales," Dargene
said.
"Our newly formed insurance group is growing rapidly and will be
marketing its products in all of our banking locations.
"We also will be giving increasing attention to marketing our products
in the rapidly growing Chicago Collar Counties region," Dargene said. "We
already have a significant presence in some parts of that market."
The return on assets for the quarter was .95 percent down from 1.06
percent in the same quarter of 1994, and the return on average equity was 11.13
percent, down from 11.74 percent.
AMCORE Financial, Inc. is a northern Illinois-based bank holding
company with assets of approximately $2 billion. Its holdings include seven
subsidiary banks operating in 34 locations.
The company also has seven primary financial service subsidiaries: a
trust company, a mortgage company, a full-service broker-dealer, a capital
management company, a collection agency, a consumer finance company, and an
insurance company. AMCORE common stock is listed on NASDAQ under the symbol
"AMFI".
###
-20-
<PAGE> 3
AMCORE FINANCIAL, INC.
CONSOLIDATED KEY FINANCIAL DATA SUMMARY
NOTE: All prior year amounts have been restated to reflect the August 1, 1994
merger with First State Bancorp of Princeton, Illinois, Inc., and the
December 19, 1994 merger with NBA Holding Company of Aledo, Illinois,
which were accounted for under the pooling of interests method.
<TABLE>
<CAPTION>
(In thousands, except share data) QUARTER ENDED MARCH 31, TWELVE MONTHS ENDED MARCH 31,
--------------------------- ---------------------------------
PERCENT PERCENT
FINANCIAL HIGHLIGHTS 1995 1994 CHANGE 1995 1994 CHANGE
- ---------------------------------------------------- ------- ------- ------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net revenues, including security gains.............. $25,883 $24,956 3.7% $103,103 $101,164 1.9%
Operating expenses.................................. 19,692 18,448 6.7% 75,982 73,833 2.9%
Net income.......................................... 4,614 4,763 -3.1% 19,451 19,061 2.0%
Net income per share................................ 0.37 0.38 -2.6% 1.57 1.54 1.9%
Cash dividends per share............................ 0.15 0.135 11.1% 0.58 0.455 27.5%
Book value per share................................ 13.85 13.18 5.0%
KEY FINANCIAL RATIOS
Return on average assets......................... 0.95% 1.06% -10.4%
Return on average equity......................... 11.13% 11.74% -5.2%
Net interest margin (FTE)........................ 4.30% 4.61% -6.7%
Net operating expense/avg. assets................ 2.54% 2.55% -0.4%
Average total equity to avg. assets.............. 8.50% 9.00% -5.5%
Other income/net revenues (1).................... 28.9% 28.3% 2.2%
Efficiency Ratio (FTE)........................... 72.0% 69.6% 3.4%
INCOME STATEMENT
Interest income..................................... $35,445 $30,220 17.3%
Interest expense.................................... 17,485 12,588 38.9%
------- ------- -------
Net interest income.............................. 17,960 17,632 1.9%
Provision for loan losses........................... 296 128 131.3%
Other Income:
Trust income..................................... 2,823 2,621 7.7%
Service charges on deposits...................... 1,679 1,571 6.9%
Mortgage revenues................................ 546 759 -28.1%
Collection fee income............................ 453 452 0.2%
Other............................................ 1,803 1,550 16.3%
------- ------- -------
Total other income............................ 7,304 6,953 5.0%
Net security gains.................................. 619 371 66.8%
Operating expenses:
Personnel costs.................................. 10,813 9,909 9.1%
Net occupancy expense............................ 1,313 1,111 18.2%
Equipment expense................................ 1,548 1,413 9.6%
Insurance expense................................ 1,039 1,030 0.9%
Professional fees................................ 534 698 -23.5%
Amortization of intangible assets................ 637 639 -0.3%
Other............................................ 3,808 3,648 4.4%
------- ------- -------
Total operating expenses...................... 19,692 18,448 6.7%
------- ------- -------
Income before income taxes.......................... 5,895 6,380 -7.6%
Income taxes........................................ 1,281 1,617 -20.8%
------- ------- -------
Net income.................................... $4,614 $4,763 -3.1%
======= ======= =======
Average shares outstanding (000).................... 12,410 12,376 0.3%
Ending shares outstanding (000)..................... 12,423 12,377 0.4%
</TABLE>
-21-
<PAGE> 4
<TABLE>
<CAPTION>
AMCORE FINANCIAL, INC.
FIRST QUARTER FIRST QUARTER
(IN THOUSANDS) 1995 1994
---------- --------------------- --------------------
ENDING AVERAGE YIELD/ AVERAGE YIELD/
BALANCE BALANCE RATE BALANCE RATE
---------- ---------- ----- ---------- -----
<S> <C> <C> <C> <C> <C>
Assets:
Taxable securities...................... $482,533 $479,924 6.97% $449,168 6.11%
Tax-exempt securities (FTE)............. 208,901 207,664 7.74% 214,804 7.89%
Other earning assets.................... 6,406 19,509 6.21% 27,495 4.02%
Mortgage loans held for sale............ 9,941 7,028 8.65% 13,015 7.44%
Loans, net of unearned (FTE)............ 1,107,329 1,092,730 8.69% 961,726 8.13%
---------- ---------- ----- ---------- -----
Total Earning Assets................. $1,815,110 $1,806,855 8.17% $1,666,208 7.62%
Intangible assets.................... 17,328 17,706 19,373
Other non-earning assets............. 156,714 152,044 141,836
---------- ---------- ----- ---------- -----
Total Assets......................... $1,989,152 $1,976,605 $1,827,417
========== ========== ===== ========== =====
Liabilities and Stockholders' Equity:
Interest bearing deposits............... $1,364,639 $1,322,769 4.20% $1,306,118 3.48%
Non-interest bearing deposits........... 229,416 236,901 208,572
---------- ---------- ----- ---------- -----
Total Deposits....................... $1,594,055 $1,559,670 $1,514,690
---------- ---------- ----- ---------- -----
Short-term borrowings................... 174,560 205,677 6.30% 103,528 2.99%
Long-term borrowings.................... 24,433 24,497 7.65% 29,767 6.51%
Other................................... 4,607 4,254 12.01% 3,655 11.65%
---------- ---------- ----- ---------- -----
Total Interest Bearing Liabilities... 1,568,239 1,557,197 4.55% 1,443,068 3.53%
Other liabilities.................... 19,485 14,428 11,305
---------- ---------- ----- ---------- -----
Total Liabilities.................... $1,817,140 $1,808,526 $1,662,945
Stockholders' Equity................. 172,012 168,079 164,472
---------- ---------- ----- ---------- -----
Total Liabilities and
Stockholders' Equity................. $1,989,152 $1,976,605 $1,827,417
========== ========== ===== ========== =====
</TABLE>
<TABLE>
<CAPTION>
----------------------------------
QUARTER ENDED MAR. 31,
----------------------------------
PERCENT
ASSET QUALITY (IN THOUSANDS) 1995 1994 CHANGE
------- ------- ------
<S> <C> <C> <C>
Ending allowance for loan losses........... $12,712 $13,759 -7.6%
Net charge-offs............................ 204 283 -27.9%
Net charge-offs to average loans (2)....... 0.07% 0.12% -41.7%
Non-performing assets:
Nonaccrual.............................. $9,883 $10,903 -9.4%
Restructured............................ 2,050 1,036 97.9%
------- ------- ------
Non-performing loans................. 11,933 11,939 -0.1%
Other real estate owned (OREO).......... 1,084 774 40.1%
------- ------- ------
Total non-performing assets.......... $13,017 $12,713 2.4%
======= ======= ======
Key Asset Quality Ratios
Allowance to ending loans............... 1.15% 1.42% -19.1%
Allowance to non-performing loans....... 106.5% 115.2% -7.6%
Non-performing loans to loans........... 1.08% 1.23% -12.5%
Non-performing assets to loans & OREO... 1.17% 1.31% -10.4%
Capital Adequacy
Total risk-based capital................ 13.05% 12.91% 1.1%
Tier 1 risk-based capital............... 12.08% 11.77% 2.6%
Leverage ratio.......................... 8.04% 7.88% 2.0%
</TABLE>
Footnotes:
(1) Excluding net security gains.
(2) On an annualized basis.
N/M = Not meaningful
-22-
